The Presidium of the Supreme Arbitration Court of the Russian Federation (the "SAC") has upheld an application by HiPP GmbH & Co. Export KG ("HiPP") for the recognition and enforcement in Russia of the decision of a foreign arbitration court. The original claim to which the application related was for the recovery of debts owed under a distribution agreement between HiPP and LLC SIVMA Baby Food.
HiPP had originally brought the claim before the Arbitration Court of the Austrian Federal Economic Chamber, which confirmed HiPP's right to recover the debts. However, the Arbitration Court of the City of Moscow failed to recognise that decision. During the subsequent instances, HiPP's claim was rejected on the basis that the terminology differed in the Russian and English texts of the distribution agreement. As such, the courts decided that the parties had not in fact agreed on the court in which their disputes would be resolved.
Nevertheless, the SAC decided that because the parties (i) actively took part in the process; (ii) did not challenge the jurisdiction of the Arbitration Court of the Austrian Federal Economic Chamber to resolve their dispute; and (iii) did not appeal to another court, both parties had implicitly agreed that the Arbitration Court of the Austrian Federal Economic Chamber had the jurisdiction to resolve their dispute.
Recently, the SAC has supported the decisions of international arbitration courts with increasing frequency. This has served to improve the image of the country's judicial system.
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